A 10 percent optional homestead exemption will result in a potential annual savings of $125.40 for the average home valued at $268,685 in Montgomery County, Tax Assessor-Collector Tammy McRae said. The loss in revenue for the county because of a 10 percent exemption would be about $13 million, she said. However, Montgomery County expects to generate approximately $12.8 million in additional revenue this year, although the final amount may change by this summer because of taxpayer protests and proposed state legislation.
“We’ve already discussed the fact that the [county] budget has grown far and above inflation and population,” said Precinct 3 Commissioner James Noack, who proposed a 20 percent homestead exemption. “Though it will certainly present a challenge for the court to go through line by line in the budget and accommodate the full 20 percent [exemption], we do know 10 percent of that will come off growth for this year.”
However, other members of Commissioners Court had concerns about the full 20 percent exemption and offered the 10 percent option instead.
“I’m not going to put a 20 percent reduction out there knowing we need the money to fund law enforcement and road improvements,” Precinct 4 Commissioner Jim Clark said. “I want to make a commitment of a 20 percent reduction, and I feel like we could do that; I just don’t think we can do it this upcoming [budget] cycle.”
County Judge Craig Doyal said he has been talking with local mayors to try and make tax reduction a priority countywide, as the county’s portion of the tax bill is just 16 percent. There are typically six or seven taxing jurisdictions on the average tax statement, McRae said.
“If we cut too much we put ourselves in jeopardy of harming law enforcement and not being able to keep up with infrastructure, which could cost us in our economic development,” Doyal said. “Some of the chamber presidents are concerned that if we don’t keep up with our infrastructure pace, we’ll start losing economic development. That commercial development is what pays the bills for Montgomery County. It’s important we look at all of that with being mindful that we need to provide some tax relief for our citizens.”
Commissioners have until July 1 to legally amend the motion, but the Montgomery Central Appraisal District must have information regarding the exemption amount by April 1, McRae said.
In Montgomery County, average appraised home values have increased by 18 percent since 2014, according to the appraisal district. Additionally, between 2005 and 2015, overall market values increased by 142.9 percent for single-family homes in the county.
More than a dozen residents from throughout Montgomery County urged commissioners to approve the 20 percent homestead exemption during public comments at the beginning of the meeting.
“My wife and I moved here 24 years ago,” Calvin Russell said. “We’ve lived in the same house; it hasn’t changed since we built it. We were so proud when we paid it off several years ago. Today, our tax bill is about three times what my mortgage and my interest and my tax bill was when we moved here.”
Precinct 1 resident Reagan Reed said he believes the exemption is doable because of nearly $13 million in additional county revenue projected to come in this year.
“As I’m finishing college and looking at buying a home myself, I’m very concerned I will not be able to buy a home and live in the county I’ve grown up in and come to love because of high property taxes,” he said. “I might have to relocate.”
Montgomery County currently offers a $35,000 exemption for residents age 65 and older, in addition to two disabled veteran exemptions, McRae said. Residents must file an application for all exemptions with the appropriate appraisal district office.